Currency News for May 26th 2020

As global risk sentiments begin to improve following measures adopted by some countries to ease lockdown restrictions, the Ghanaian Cedi at the start of the week ended a continuous downward trajectory against the US Dollar on the Bank of Ghana (BoG) inter-bank trading platform as it posted its first weekly gain in thirteen weeks. The local currency similarly rose against the Dollar on the Open Forex Market (oanda.com) to recover part of previous week’s dip. The Cedi, however, lost steam to record gains against the British Pound Sterling and the Euro.

The last forex forward auction results indicated that demand for foreign currency continues to surge as world economies begin to open up. Bids tendered for tenors ranging from 7 days to 75 days were in excess of three times what the central bank intended to offer. Data released by the BoG after the conclusion of its recent monetary policy meeting showed that the central bank had accumulated a total of USD 10.3 billion as of end-April, 2020 in gross reserves as compared to USD 8.4 billion at year-end, 2019 which should be able to assist the BoG to sustain any currency shock.

On the BoG inter-bank trading platform, the Cedi gained 0.01% to trade at GHC 5.6181 at the start of the week from previous week’s trade value of GHC 5.6185 against the Dollar. The Cedi gained marginally against the Dollar despite growing tensions between the US and China boosting demand for the hard currency. Against the Pound and the Euro, the Cedi lost 1.23% and 1.12% to begin the week trading at GHC 6.9339 and GHC 6.1662 from previous week’s trade values of GHC 6.8495 and GHC 6.0977 respectively.

On the Open Forex Market (oanda.com), the Cedi gained 0.42% against the Dollar to trade at GHC 5.7930 at the start of the week from previous week’s trading figure of GHC 5.8175. It, however, lost 0.76% and 0.48% against the Pound and the Euro to trade at GHC 7.1225 and GHC 6.3466 at the start of the week from previous week’s trade values of GHC 7.0688 and GHC 6.3161 respectively. The Cedi lost traction to build on previous week’s gain against the Pound after UK inflation fell below 1%, its lowest in more than 3 years, heightening expectations that the Bank of England is likely to cut UK rates below zero.

According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began the year 2020 at GHC 5.5370 [January 2nd, 2020] against the US Dollar and is currently selling at GHC 5.6181 [May 26th, 2020] indicating a 1.46% year-to-date depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 5.6961 [January 2nd, 2020] and is currently trading at GHC 5.7930 [May 26th, 2020], representing a 1.70% year-to-date depreciation of the Cedi against the US Dollar.